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So, what’s happening with municipalization?
Municipalization is the term used for creating a local utility and moving away from a for-profit, investor-owned electric utility (in our case, Xcel Energy). For Boulder, it’s an opportunity to create our own electric utility—one that runs on cleaner energy, is cheaper, supports innovation, and serves the public.
- The Boulder community cares about climate change. Our community started this effort because voters want to move away from harmful sources of energy generation, like coal, and switch to more renewable sources, like wind and solar.
- Communities with public power across the US have experienced many benefits. Their power is free of obligations to shareholders and regulations that can block innovation. They are able to retain and attract new businesses; foster successful start-ups, especially around clean tech; and increase reliability of their power system.
- There are 29 other municipal utilities in Colorado, including Fort Collins and Longmont. These communities enjoy excellent power reliability and, in many cases, lower rates than we pay in Boulder.
Where are we in the process?
Boulder has filed an application with the Colorado Public Utilities Commission (PUC) for the transfer of assets necessary for a municipal electric distribution system. This application describes the assets to be acquired, the manner in which the municipal system will integrate with the Xcel Energy system, and how Boulder plans to operate the system to ensure safe, reliable electric service at rates comparable to Xcel’s. The application also makes clear that the city is not seeking to serve any out-of-city customers. If approved, Xcel would remain their provider.
To ensure a seamless transition for the customers Boulder would serve, we’ve put out requests for contracts with energy suppliers and companies that would maintain and operate our system, ensuring the very best reliability and service for our community.
Following the PUC process, if Boulder and Xcel cannot agree on a purchase price, Boulder will file a condemnation action in district court. Condemnation allows a government to acquire property necessary for a public purpose if it pays just compensation to the property owner. The city has offered to pay Xcel outright for its system, but the company has declined to sell.
The city also remains open to reaching an alternate agreement with Xcel and working together to develop a meaningful and measurable plan that would meet our community’s goals.
How would municipalization support Boulder’s economic vitality?
The electric industry is evolving, and it’s driving new economic opportunities across the country. Proactive utilities are changing the way they generate, deliver, and use energy above and beyond what state regulations mandate. These new approaches are reshaping the electric grid, turning it from a one-way conduit for distributing power into an intelligent network for improving energy access, affordability, reliability, and efficiency. Boulder would thrive in this new landscape—both economically and in terms of innovation—if the city were free to engage with the market.
Our community is a hot spot for clean tech and clean energy , and many local companies in these industries offer products that provide more control over energy use and enhanced customer experience. A municipal electric utility would be able to directly engage with these progressive companies to test new approaches to power and service that wouldn’t be possible elsewhere—or within the confines of our current investor-owned utility.
In addition, many communities that utilize municipal power have leveraged it into a business opportunity that helps support a vibrant local economy. If Boulder formed an electric utility, we would be part of a dynamic energy market that embraces innovation and progress.
A local electric utility can be good for business—and for the environment.
How is the city managing costs—and cost benefits— related to municipalization?
The city has spent $7.5 million on this initiative, most of which has come from a voter-approved tax on the utility. For average residential customers, this tax amounts to $1.20 extra on their monthly bill. It covers legal and engineering costs, as well as key staff positions, hired on a fixed-term basis.
While this is a considerable investment, electric utilities create more than enough revenue from customer rates to cover their own costs—and then some. In 2014, Xcel’s profits from our city alone amounted to between $20 and $34 million. Currently, these profits leave the city and go to Xcel shareholders.
A local electric utility would keep these dollars and invest them back into our community’s electrical system. Some public power utilities have invested in new technology and infrastructure improvements, such as upgrades to the electric system or undergrounding of power lines. Others have lowered rates or increased energy efficiency efforts. If we form an electric utility, we would decide, together, how to invest in Boulder’s energy future.
Is municipalization the only way to make a positive difference for our climate?
No, and we are actively pursuing other approaches at the same time. These include:
- Continuing successful energy efficiency programs, like EnergySmart, which began as a City of Boulder initiative and is now a model partnership
- Exploring an ordinance that would require commercial property owners to track and report their buildings’ energy use
- Working with lawmakers and others to explore legislative changes
- Piloting new customer-focused initiatives and providing start-up funding to support Boulder Energy Challenge projects
- Studying our community’s full solar potential and creating a new mapping tool to chart our prime areas for harnessing power from the sun
- Collaborating with other cities that want to transform their energy systems and current ways of doing business
However, the city’s goal of owning the infrastructure (poles and wires) that serves us is a critical part of the strategy to prioritize clean energy and shift away from fossil fuels. Absent this, or a meaningful, forward-thinking partnership with Xcel, the city’s ability to impact emissions is severely limited.
The city has studied this issue carefully, and the analyses, which have been vetted by hundreds of community members and outside industry experts, show this is both possible and beneficial to Boulder. Your elected officials will only proceed if municipalization is financially prudent and if other Charter conditions, including reliability, can be met. The upcoming steps in the legal process and in the transition planning phase will determine if Boulder can continue to move forward.